Further to the issue of the Flare Gas (Prevention of Waste and Pollution) Regulations, 2018, which establishes a framework for the Nigerian Flare Gas Commercialisation Programme (NGFCP), the Department of Petroleum Resources, on November 26, 2018, issued an invitation for Expressions of Interest to participate in the competitive bid process for the award of ‘Permits to Access Flare Gas.’
As discussed in our earlier publication, the NGFCP is a gas flare reduction strategy by the Federal Government that capitalises on the government’s right to take associated gas free of cost at flare and without payment of royalty in accordance with Paragraph 35(b)(i) of the First Schedule to the Petroleum Act, 1969. It envisages the issuance of permits by the Minister of Petroleum Resources to third parties, via a competitive bid process, to capture and utilise such flare gas. If properly implemented, the NGFCP has the potential to achieve the Federal Government’s goal of eliminating gas flaring by 2020, in line with its commitment under the Paris Climate Change Agreement, while catalysing a rapid increase in gas utilisation projects.
Interested parties (including consortiums) that have the capacity to utilise flare gas have therefore been invited to register their interest in participating in the bid process and to submit Statements of Qualifications. In addition to demonstrating technical and commercial capacity, interested parties must also demonstrate project development experience and proven commercial application of the technology proposed to be adopted. It should be noted that gas producers are precluded from participating in the NGFCP.
The invitation sets out the following timetable for the bid process.
- Registration/Submission of Statement of Qualification (SOQ): Q4 2018 – January 20, 2019
- Shortlist of qualified applicants: Q1 2019
- The issue of Request for Proposals (RFP): Q3 2019
- Selection of preferred bidders: Q3 2019
According to the invitation, approximately 792 mmscf/d of flare gas distributed over 178 flare sites is available for auction on an “as is” basis. This means that the Federal Government will not undertake to provide any additional gas pipelines or other infrastructure beyond what is currently in place. The invitation does not, however, indicate the location of the flare sites or whether they will be auctioned in clusters. We expect such information to be set out in the Request for Proposals that will be issued to shortlisted bidders.
If you have any questions or require support with respect to participating in this programme, please feel free to reach out to any member of our team.
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